KENANGA INVESTMENT BANK BERHAD INTEGRATED ANNUAL REPORT 2024 WE ARE KENANGA OUR SUSTAINABILITY APPROACH LEADERSHIP STATEMENT HOW WE ARE GOVERNED FINANCIAL STATEMENTS SHAREHOLDERS’ INFORMATION ADDITIONAL INFORMATION OUR VALUE CREATION APPROACH 21 20 To support business expansion, KIG’s distribution network grew to 5,500 licensed unit trust and private retirement scheme consultants, making it the second-largest in the industry. Its reach was further strengthened by fourteen (14) regional offices, including new locations in Miri and Kuching. KIG received multiple accolades for its performance in 2024. The 2025 LSEG Lipper Fund Awards recognised the following funds; Kenanga DividendEXTRA Fund was awarded Equity Malaysia Diversified (3-Years) under the Malaysia Fund Awards category. Under the Malaysia Provident Funds Awards category, Kenanga Malaysian Inc Fund was awarded Equity Malaysia Diversified (10-Years), Kenanga Balanced Fund was awarded Mixed Asset MYR Bal – Malaysia (10-Years) and Kenanga Managed Growth Fund was named Mixed Asset MYR Flexible (10-Years). The Kenanga SyariahEXTRA Fund was awarded Mixed Asset MYR Bal – Malaysia under the Malaysia Islamic Funds Awards category. The Morningstar Awards 2025 awarded the Kenanga Blue Chip Fund with Best Malaysia Large-Cap Equity Fund title. The Hong Kong-based Asia Asset Management’s 2025 Best of the Best Awards awarded KIG a total of nine awards including: Malaysia Best Retail Asset Management Company, Best Impact Investing Manager in ASEAN, Malaysia Best Impact Investing Manager, Malaysia Best Equity Manager, Malaysia Best The Group’s Listed Derivatives arm, Kenanga Futures Sdn Bhd (“KFSB”), delivered its highest profit in over a decade, with PBT rising to RM7.8 million in FY2024 from RM6.2 million the year before. This exceptional performance was driven by strong execution volumes and strategic initiatives under the THRIVE 2024 – 2026 Business Plan Blueprint (“THRIVE Blueprint”), a strategic roadmap designed to reinforce KFSB’s market leadership. During the year, KFSB’s execution of Bursa Malaysia Derivatives Berhad (“BMD”) contracts surged by 44% to 14 million contracts, up from 9.7 million in 2023. Meanwhile, total BMD contract volumes hit a new record high of 22.7 million in 2024—a 28% growth from 17.8 million contracts recorded a year ago. This strong growth led to KFSB’s market share expanding to 33%, further solidifying its position as the country’s No. 1 Futures broker. Execution volumes for CME Group (“CME”) products also saw exceptional growth, increasing by 56% year-on-year. KFSB’s sterling performance was recognised at the Bursa Excellence Awards 2024, where the company was named Best Overall Derivatives Trading Participant (Champion), Best Institutional Derivatives Trading Participant (Champion), Best Trading Participant: Commodity Derivatives (Champion), and Best Trading Participant: Equity & Financial Derivatives (Champion). Listed Derivatives Business Risk Management 2024 was marked by no shortage of surprises, with an increased number of unexpected risk events and untoward market volatilities that unfolded with greater frequency than in previous years—impacting both domestic and global landscapes. These events frequently set off unexpected ripple effects far beyond their initial triggers, driven by growing market interconnectedness. In an increasingly challenging, sophisticated, and dynamic digitalised financial services landscape, reinforcing our business versatility, operational agility, and resilience remained a key priority. This continues to drive our approach in managing core principal risks, while staying constantly vigilant and engaging in strategic, measured, and purposeful risk-taking. While we continued to manage financial risks to support the Group’s sustainable performance and growth, it remains imperative to invest continuously in resources that strengthen operational and technological resilience. With increasing reliance on technology and the interconnectedness of digital networks within an increasingly complex online ecosystem, cybersecurity has emerged as a critical operational risk area for the Group. Accordingly, we have made targeted investments to enhance our cyber defenses and safeguards through modernised technology solutions, improved business continuity capabilities, and mitigation of third-party vendor risks. In parallel, advancements in artificial intelligence present new opportunities to further strengthen our internal controls and risk management capabilities. Managing ‘Climate Change Risk’ is core to our sustainability. As part of our decarbonisation efforts, the Group has taken necessary steps to proactively manage climate risk to ensure we deliver our sustainability commitments through creation of positive impact and value for all stakeholders. Considering these wide-ranging implications of climate risks on our portfolios, we continued to enhance our Climate Change Risk Management Framework (“CCRMF”) in order to remain strong in our risk governance and practices supported with sound and relevant policies, procedures and methodologies. Much is expected to see continued challenges and ‘surprises’ in 2025 amidst radical geopolitical uncertainties, technology disruptions and escalation of trade wars, we are confident that the team stands ever ready to face and tackle the challenges ahead. We have built a strong capital and funding structure, formidable risk culture that focuses on risk fundamentals, enhanced operational and technology resilience and risk management capabilities. More information on Risk Management and Internal Controls can be found on pages 126 to 130 of this Integrated Annual Report 2024. Outlook for 2025 Malaysia enters 2025 navigating a more complex global landscape, shaped by evolving geopolitical dynamics, shifting trade policies, and volatile international markets. Domestically, economic activity is expected to remain resilient, supported by rising household income, higher tourist arrivals, an ongoing technology upcycle, and the rollout of previously approved investments underpinned by record-high allocations under the Federal Budget 2025. However, external headwinds persist. Escalating trade frictions, particularly the uncertainties of US tariff actions, may disrupt global supply chains, dampen sentiment, and constrain external demand. In addition, uncertainty surrounding China’s recovery may also weigh on regional economic prospects. While near-term outlook remains cautious, Malaysia’s friendly trade and investment policies, position the country to capture opportunities arising from shifting trade and investment flows, which may help cushion some of the prevailing downside risks. Despite rising global economic uncertainty, Bank Negara Malaysia is expected to maintain the OPR at 3.00% throughout 2025, balancing stability and economic growth. The current monetary stance aligns with Malaysia’s ongoing structural reforms and initiatives under the Madani government, laying the groundwork for sustained growth. Alternatives Manager, Malaysia Best ESG Engagement Initiative, Malaysia Fund Launch of the Year, Malaysia CEO of the Year and Malaysia CIO of the Year. The BrandLaureate BestBrands Awards 2023 – 2024 named the firm Brand of the Year (Wealth Management & Investment Solutions). The Kenanga Growth Fund Series 2 was awarded Sector Equity - Malaysia Focused by the FSMOne Recommended Unit Trusts Awards 2024/2025. For its efforts in financial planning, it received the MFPC Excellence in Financial Planning Advancement Award by the Malaysian Financial Planning Council for Financial Planning Educational Impact and Outreach in Malaysia. Looking ahead, KIG remains dedicated to expanding its offerings to address the evolving needs of investors and capitalise on emerging market opportunities. Future initiatives will focus on delivering innovative solutions designed to optimise returns, diversify risks and align with its clients’ financial objectives, and these include strategies emphasising diversified portfolios across asset classes, tailored goal-based investment options and advanced quantitative and algorithm-driven approaches. In addition, KIG aims to harness growth opportunities in high-potential regional markets. Through these efforts, KIG seeks to strengthen its position as a trusted partner in asset and wealth management. Adding to the momentum, Ms. Azila Abdul Aziz, Chief Executive Officer/ Executive Director & Head of Listed Derivatives, KFSB, was named the Chief Executive of the Year at the Futures & Options World (“FOW”) Asia Pacific Awards 2024. Beyond financial performance, KFSB strengthened its presence on the global stage, engaging with industry stakeholders through key events such as the Palm & Lauric Oils Price Outlook Conference & Exhibition (POC) 2024, Women in Finance Awards Asia (WIFAA) 2024, FOW Trading Singapore 2024 and the Futures Industry Association (FIA) Asia Derivatives Conference 2024. At the same time, the business expanded its outreach to retail investors through initiatives such as Futures ON-THE-GO and Mastering Futures, which aimed to enhance financial literacy and promote derivatives trading. Digital engagement also remained a priority, with KFSB continuing its series of online public education efforts and salesforce engagements to promote both new and existing CME and BMD products. As KFSB advances to the next phase of its THRIVE Blueprint, its focus will be on expanding the product suite, enhancing infrastructure, and capitalising on opportunities in Shariahcompliant and ESG-linked derivatives. These initiatives will further strengthen its leadership in the derivatives market. GROUP MANAGING DIRECTOR’S MANAGEMENT, DISCUSSION AND ANALYSIS GROUP MANAGING DIRECTOR’S MANAGEMENT, DISCUSSION AND ANALYSIS
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